Last year was full of surprises in the video game industry. Esports and "battle royale" games (Fortnite mostly) were two of the hottest topics that analysts, investors, and gamers talked about in 2018. If you're a shareholder of Activision Blizzard (ATVI), Electronic Arts (EA 1.30%), or Take-Two Interactive (TTWO -0.03%), there were things to be excited about, and some disappointments along the way.

Let's review the key initiatives under way at each of those video game companies, so you will know what to watch as we move through the new year.

Check out the latest earnings call transcripts for Electronic Arts, Take-Two, and Activision Blizzard.

A large arena filled with fans watching a brightly lit stage.

Overwatch League Grand Finals at Barclays Center in July 2018. IMAGE SOURCE: ACTIVISION BLIZZARD.

Activision Blizzard

Last year was a mixed bag for Activision. The year started on a high note with 10 million viewers tuning in online to watch the opening weekend of Overwatch League. It followed that by delivering strong operating results through the first half of the year, driven by strong player engagement across the company's games. 

However, the year ended on a sour note due to concerns about Epic Games' popular player-vs.-player shooter Fortnite Battle Royale drawing gamers away from Activision's biggest games, such as Destiny and Overwatch. There was also a backlash from Diablo fans over the company's announced mobile release for that franchise in November. 

Meanwhile, the number of monthly active users (MAUs) playing Activision's games has been steadily trending downward. Most of that decline can be traced to less-engaged players leaving King's mobile games, but even Overwatch experienced a year-over-year decline in MAUs. 

The stock price is down 36% over the last six months, as expectations for near-term growth have fallen dramatically. Analysts now expect 2019 revenue to decline 1.4% to $7.35 billion, while adjusted earnings per share are expected to be flattish at $2.61. However, I would take analysts' estimates with a grain of salt at this early juncture. Activision is expected to report record revenue and earnings for 2018, and there are a few catalysts for 2019 that could lead the company to outperform the analysts' expectations.

Activision will open season 2 of the Overwatch League on Feb. 14. Esports is a key growth initiative for the company, so it's crucial that it manages to grow viewership. Additionally, this could be a big year for the company's consumer products business, in which LEGO and Hasbro will be launching Overwatch-themed toys this year

Activision doesn't have any significant new game releases scheduled for 2019, so the most important metric for investors to keep an eye on will be in-game spending. Increasing its in-game revenues is one of the highest priorities of the company, since those now account for most of its annual revenue. 

Electronic Arts

EA didn't have one of its better years in 2018. The stock is down 35% over the last six months, following a few miscues by the game maker. The company lowered its guidance for fiscal 2019 (which ends in March) as a result of the one-month delay of Battlefield V (which was released in November) as well as the lower-than-expected performance of Ultimate Team in FIFA 19

Nonetheless, EA has some positive catalysts to look forward to in the near term, starting with a new franchise called Anthem expected to release in its fiscal fourth quarter. The company also has two games in the pipeline from developer Respawn, known for its work on the Titanfall series, which should be out in time for next holiday season. 

Also, EA is beefing up its subscription services, such as Origin and EA Access, in addition to investing in a new cloud gaming service. The company wants to offer more third-party games in its subscription services. Investors will want to watch how this develops, as growth in subscriptions could boost the company's digital revenue, and thereby expand margins and profits.

Finally, EA recently released its first foray into mobile esports with Command & Conquer: Rivals, a title that could revitalize EA's mobile game business, which grew just 1% over the past year. Analysts expect EA to increase revenue by 7% in fiscal 2020, while adjusted earnings per share are expected to increase 12% over fiscal 2019. 

ATVI Revenue (TTM) Chart

ATVI Revenue (TTM) data by YCharts

Take-Two Interactive

Although the stock couldn't shake off the weakness in the broader market -- its shares fell 17% in the last six months -- Take-Two fared much better than its larger siblings last year. Its relative outperformance is likely due to the phenomenal success of Red Dead Redemption 2. The game sold 17 million copies in the week after its October launch, raking in $725 million. It was the No. 1 selling game of 2018, according to NPD. 

That robust sales performance could drive an additional lucrative opportunity because of Red Dead Online. Grand Theft Auto Online has been a money tree growing at Take-Two's headquarters for the last few years, as players spent freely on in-game content. This drove up recurrent consumer spending, swelling Take-Two's free cash flow

Red Dead Online could produce a similar wave of digital revenue. Of course, the game has big shoes to fill: Grand Theft Auto V sold 100 million copies in five years. But Red Dead is off to a great start. What's more, Grand Theft Auto continues to perform well, too, so Take-Two has a pair of money trees now. 

Elsewhere, Take-Two's NBA 2K19 is on pace to become the company's best-selling sports title ever. In an effort to further grow that franchise around the world, Take-Two launched NBA 2K League last year in partnership with the NBA -- the company's first big bet in  esports. Take-Two signed two new teams to bring the total to 21 for the league's second season. It's still unclear just how many people will be interested in tuning in to watch virtual NBA games when they can easily watch real ones, but management believes esports will be a significant profit driver for the company over the long term. 

Meanwhile, Take-Two's mobile game unit, Social Point, which the company bought in 2017 for $250 million, has 10 new titles in the pipeline. During the fiscal second-quarter conference call, President Karl Slatoff said, "Looking ahead, our labels have a strong development pipeline, which includes groundbreaking, new intellectual properties, and releases from our renowned franchises. In addition, we'll continue to support our games with offerings designed to enhance players' experience and drive engagement." 

Despite all these positives, analysts aren't optimistic in the near term. The consensus estimate forecasts that Take-Two will report a 2.8% decline in revenue in fiscal 2020, with adjusted earnings per share growing 3.8% to $5.17. 

Nonetheless, looking beyond the next 12 months, it seems Take-Two has a bright future.

The big picture

Expectations have gotten very low for these top game companies in recent months. Meanwhile, the industry is currently estimated to worth about $138 billion, according to Newzoo, and is expected to grow at a double-digit rate. More people are playing video games than ever before, and I think the long-term trends favor Activision, EA, and Take-Two performing well for shareholders over time.